Penalty Under Section 271(1)(c) Invalid When Income Addition Based on Estimated Profit Rate Differences

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....ITAT ruled that penalty under section 271(1)(c) cannot be sustained where income assessment was based on estimated net profit rate of 24.50% versus assessee's declared 22.72%. When Assessing Officer resorts to income estimation after rejecting books of accounts under Section 145(3), it does not automatically establish concealment or furnishing of inaccurate income particulars. Assessee demonstrated through comparable resort financials that declared profit margins aligned with industry standards. Since additions resulted from estimation rather than proven misrepresentation, and Revenue accepted the estimated rate basis, penalty imposition was unwarranted. Appeal allowed and penalty deleted.....